Tea Prices Have Exploded Thanks To The Drought

The Financial Times' Jack Farchy
writes that the price of tea has surged 41 percent this year
to surpass $4 per kilo as drought conditions sweep over major tea
producing countries.

"Dry conditions, poor rains and frosts have hit tea
production in Kenya, the largest exporter of black tea. A bad
monsoon has reduced production prospects in India and Sri Lanka,
two other major exporters."

The last time prices were this high was in 2009,
when wholesale broken pekoe 1 leaves costs hit a
record $5.45.

Unlike coffee, tea does not trade in a futures exchange but
via physical deals at weekly auctions in Mombasa, Kenya, Farchy
notes.

Traders and analysts believe that prices may climb further
this year as the production shortfalls squeeze the market, he
says.